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This note was originally published October 18, 2012 at 09:36 in Gaming

MGM China announced that they accepted a Land Concession Contract from the Macau government.  The stock is bid up 6% on this news.  We don’t think people fully understand the process of developing a new casino property in Macau.  MGM Cotai still needs to be formally Gazetted and then obtain a construction permit before the 3 year construction timeline can even begin.

Here is the timeline for Wynn Cotai:

Land Concession Contract:  Sept 12, 2011  

Formal Gazette approval:  May 2, 2012

Building Permit:  ?????

Wynn Cotai hasn’t even gotten its construction permit yet.  If this same timeline holds for MGM, then we should expect Gazetting in 8 months and who knows when for the building permit.  Thus, it should be at least a year and more likely two before construction can even begin and 4-5 years before the property would open.  Our original expectation on the timing of the MGM Cotai opening was 2017-2018 so today’s announcement doesn’t change that.

We would fade this news.